A Dark or Bight Green Future?

Agricultural Transformation in Ethiopia towards 2050

Between 1983 and 1985, Ethiopia experienced one of its worst episodes in modern history with a famine that caused 1.2 million deaths and 2.5 million displacements (Gill, 2019: 44). In addition, the famine produced severe negative economic impact with GDP per capita drops of -5.9% in 1984 and -13.9% in 1985 (World Bank, n.d.a.). Researchers like Webb, Von Braun, and Yohannes (1994: 1) stated that famine in Ethiopia had “evolved into an almost structural problem” and that absence of human capital, lack of farming technology, predisposition to production variations, and inaccessibility to major markets were some of the underlying factors that could not be solved with short-term crisis responses. Despite low expectations in the country’s future, Ethiopia was able to recover and since 2004 the country has not had a single year of economic contraction (World Bank, n.d.a). In fact, the country’s average annual GDP growth rate (at 7.3%) exceeds the average growth rate of Sub Saharan African (SSA) when excluding high income countries (at 4.3%) (World Bank, n.d.a.).

Considering Ethiopia’s unexpected recovery, but not forgetting the country’s famine and previous economic struggles, it is relevant to inquire how Ethiopia’s future will look towards year 2050. This essay will focus in the agricultural sector and two of the “certainties” towards 2050: continuous urbanization and a growing population. Under this context, the essay will answer the following research question:

How could urbanization and a growing population impact agricultural transformation and food security towards 2050?

The World Bank (n.d.b.) estimates that by 2050, Ethiopia’s urban population will increase by 221.6% and that the urbanization share will go from 21.7% to 39.1% (See Figure 1). A growing urban population could be a double edge sword as labour productivity could increase, through increasing labour supply; but if no new opportunities are generated, a large part of the population could become unsatisfied and -consequently- promote social instability (Todaro, 1997). Moreover, rural migrants who lack jobs tend to engage in low-productivity non-tradable informal service jobs (Fox, Thomas, & Haines, 2017); a sectorial transition that could hurt the economy in the long-term. Another doubtful advantage is that, by demanding more quantity and higher-quality of food products, growing urbanization could push for modernization of agri-food systems (Reardon, Tschirley, Minten, Haggblade, Liverpool-Tasie, Dolislager, Snyder, & Ijumba, 2015); however, if the country is not able to produce -or acquire- enough food then it could run into food security issues (Andersson Djurfeldt, 2015).

Figure 1. Ethiopia - Historical and Projected Urban Population

Source: Author’s own elaboration with World Bank (n.d.b.) data

Despite Ethiopia’s urban population percentage is low in comparison to the rest of the world (Vandercasteelen, Tamru, Minten, & Swinnen, 2016), increasing urbanization rates and a growing population are not an unknown phenomenon to the country. In fact, from 1991 to 2019, Ethiopia’s urbanization percentage went from 12.9% to 21.6% and overall population grew by 290.7%, a higher growth than the one projected towards 2050 (World Bank, n.d.a.). In the same period, the agricultural sector’s value-added contribution declined by 25.1 percentual points, while the value-added contribution of the industrial and service sector respectively increased by 17.5 and 7.4 percentual points (World Bank, n.d.a). Similarly, agriculture’s employment share decreased by 10.2 percentual points; with most of the labour

transferring to the service sector (See Appendix). Even though there has been a reduction in agriculture’s value-added contribution and employment share, the sector’s nominal contribution increased by 273.1%; moreover, with a 66.6% employment share and a 33.5% value-added contribution to the overall GDP, the importance of the agricultural sector remains high (World Bank, n.d.a). If Ethiopia can replicate the agricultural sector and structural transformation trends from 30 years ago towards the next 30 years, then 2050 looks promising.

Furthermore, while analysing the rural-urban migration patterns in Ethiopia, Dorosh, Thurlow, Worku Kebede, Ferede, and Taffese (2018) recognized that sustained investment in agriculture and the agri-food system is critical to promote social and financial inclusion in the short-term, but concluded that investing in cities, after the mid-2020s, will produce faster overall economic growth and higher pro-poor growth. Moreover, Vandercasteelen, Tamru Beyene, Minten and Swinnen (2018) proposed that, in Ethiopia, proximity to bigger cities, significantly benefits agricultural production, as producers can obtain better access to markets, acquire up-to date information, and reduce transaction costs. Nevertheless, Ayele and Tarekegn (2020) raise concern on the influence of urbanization on peri-urban agriculture in Ethiopia, as unorganized urban expansion has promoted the construction of low-quality housing on agricultural land, thus minimizing land accessibility for peri-urban farmers. Moreover, they found a significant positive correlation between urban related land loss and grain production decrease.

These contrasting findings are relevant, as urbanization and agricultural transformation could have detrimental effects on each other but are not necessarily dualistic. Consequently, it should be noted that in order for farmers to take full advantage of the urbanization process, there is a need of government involvement, targeted agricultural policies, and a well-planned urbanization strategy. Concerning public investment in the agricultural sector, Rohne Till (2021) highlights the commitment and central role of the state in Ethiopia’s agricultural transformation. She explains that spending in infrastructure and extension has been a priority, while spending on irrigation, R&D, and input subsidies has been modest. As well, in accordance with the agricultural trends shown in the appendix and discussed in this paper, she argues that agricultural growth started in Ethiopia in the 1990s, particularly through the implementation of the Agricultural Development Led Industrialization (ADLI) strategy since 1993. Moreover, she concludes that subsequent agricultural transformations could be achieved by replicating Ethiopia’s policies focus (Rohne Till, 2021).

Regarding the impact of increasing urbanization in food security, Matuschke and Schmidhuber (2009) constructed current and projected food density maps for years 2005 and 2050 for South and East Asia and SSA. Through their analysis they encountered that countries like Ethiopia will develop higher food density areas which will pose a threat to all dimensions of food security (See Figure 2). Nevertheless, food insecurity is already present in rural Africa, as migration is largely pursued by low productivity smallholder farmers who, despite living in low food density farming areas, are not even able to feed themselves (Andersson Djurfeldt, 2015). Migration then could become an opportunity instead of a threat as farmers and migrants could exploit the new stablished linkages between rural farming and urbanization.

Figure 2. Food Density Maps for Ethiopia

Source: Author’adaptation of Matuschke and Schmidhuber (2009) food density maps for SSA

Concerning rural-urban proximity, Bryan, Chowdhury and Mobarak (2014) performed randomized control trials through which they provided a stipend to rural farmers -so they could cover traveling expenses to market their products in the next urban area- and found that the additional obtained income from marketing their products allowed farmers to provide an extra meal per day for every family member for three months. Additionally, simulating the impact of rural-urban migration in rural towns in Ethiopia, Dorosh and Thurlow (2012) encountered that the rural-urban wage gap would decrease, rural agricultural products could be sold at higher prices, and rural farmers would experience lower underemployment. As a consequence, rural farmers would obtain more profit and could reinvest their earnings promoting the development of non-farming economic activities (Haggblade, Hazell, & Reardon, 2007).

Furthermore, Arslan, Egger, and Winter (2019) propose that increased urban investment in rural areas can encourage higher rural-urban migration, as rural workers would still look for urban employment and would be able to migrate through the obtained benefits from increased agricultural production; in fact, they found that rural-urban migration patterns up to 2015 are positively correlated with higher agricultural productivity and increasing shares of non-agricultural employment. Consequently, also in rural areas, urbanization and agriculture could experience a positive bidirectional relationship where -through increased incomes- urbanization could encourage rural development, generate additional rural-urban migration, and promote further structural transformation.

Moreover, as the process of urbanization evolves, agri-food systems will become progressively more important (Arslan et al., 2019). For instance, Minten, Habte, Tamru, and Tesfaye (2018) found that, in Ethiopia, due to urban consumer’s rapid increased expenditure in dairy products the quantity of dairy processing companies tripled; as well, they found that about one third of the milk drank in the cities came from the urban farming sector. In addition, they researched upstream impact produced by increasing demand and found that, in milk production, there is more utilization of cross-bred cows, enhanced accessibility to livestock services, and milk-yield improvements.

Particularly, in the context of SSA, despite there has been sectorial employment share transfers, the different sectors productivity has remained stagnant or even decreased (See Appendix). The stagnation or decrease in productivity has been mainly due to the transfer of agricultural labour into a low productivity service sector. In contrast, between 1991 and 2019, Ethiopia has experienced labour productivity increments in all sectors, with the service, industry, and agricultural sector, respectively increasing by 225.7%, 356.6%, and 66.5% (See Appendix). Maintaining the described trends will be critical to achieve a successful agricultural transformation towards 2050. In that sense, investing in the implementation of efficient agri- food systems will be key, as manufacturing and services agro-processing activities provide opportunities for a gradual structural transformation that would allow for progressive productivity increases.

Moreover, regarding both productivity and food security, Shiferaw, Kassie, Jaleta and Yirga (2014) studied 2000 farm households in Ethiopia and found that households that adopted improved wheat varieties experienced higher yields and a significant increase in food security. Similarly, Heck, Campos, Barker, Okello, Baral, Boy, Brown, and Birol (2020), emphasized the importance to develop biofortified crops in order to help close the food security gap in the future. Particularly they highlight the 2016 drought in Ethiopia, in which higher quality seeds of potatoes and sweet potatoes -accompanied by enhanced seed management information- were provided with the intention to mitigate future demand shortfalls during crises (International Potato Center, 2019). Therefore, towards 2050, investing in research for the agricultural sector will be critical to improve both the yield and nutritious value of crops in order to ensure food security in Ethiopia.

In summary, in the context of Ethiopia, this paper explores the impact that two of the “certainties” towards 2050 -urbanization and a growing population- could have in agricultural transformation and food security. The paper addresses the two sides of the coin by recognizing challenges but also highlighting opportunities. For example, with regards to urban expansion, it brings attention to the problem of reduced land accessibility for farmers as housing is being built in peri-urban farming locations. Nevertheless, it emphasizes that farm proximity to urban areas reduces transaction costs and facilitates market accessibility for farmers.

Similarly, it acknowledges that a growing population will pose food security challenges in high density urban areas; but stresses that the increasing demand will also generate opportunities to develop a more efficient agricultural sector. As well, it proposes that there could be a positive impact in productivity as linkages between agriculture and new manufacturing and services agro-processing activities will be generated. Lastly, it argues that to satisfy the higher-quality and better nutrition demand there will be a need to engage in R&D for the agricultural sector.

To conclude, during the last 30 years Ethiopia’s trends show evidence of a positive agricultural transformation. If the country manages to replicate the observed trends for the next 30 years, address the mentioned challenges, and take advantage of the proposed opportunities, then the future towards 2050 looks promising. In this regard, the paper stresses the need of direct government involvement with targeted investment and policy implementations in favour of the agricultural sector and agricultural related activities. As during previous years, Ethiopia’s government support will be critical to ensure a successful structural transformation and food security for the country. Moreover, urbanization should not randomly occur, but there should be a well-planned strategy so that urbanization does not hurt the agricultural transformation process but that it rather benefits it.

Notes

*Implications of the current conflict are not addressed on this essay.

*Essay written for the "EKHT 41 – Agricultural Transformation in the Development Process" course at Lund University.

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